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UK industrial property remains top performer in capital value growth

November 8, 2017

Cross sector UK commercial property capital values increased by 0.4% in October, boosted by a strong performance from industrials, data from CBRE shows.

Industrial capital growth outperformed the other main sectors again in October, increasing 1.1% over the month. South East industrials slightly outpaced the rest of UK with an increase of 1.3% compared with 0.9%. Rental value growth in the industrial sector was 0.4%, with the South East again slightly outperforming the rest of UK, 0.4% and 0.3% respectively.

Miles Gibson, head of research at CBRE UK, said: “As it has done throughout 2017 industrial performance again outpaced the other main sectors. With total returns for the year now at 9.1%, investors can look forward to double digit returns for 2017.”

Capital values in the UK’s office sector increased by 0.4% in October. Central London, outer London/M25, and rest of UK offices all reported capital value increases in line with the national average.

However, within central London there was a divergence between two submarkets. The West End & Midtown reported an increase of 0.6% in capital values while City office capital values fell by -0.1%, the second consecutive month of decreasing capital values.

Meanwhile rental values increased 0.1% across the sector. Central London rental values were flat in October, while the outer London/M25 and rest of UK markets reported increases of 0.1% and 0.2% respectively.

In retail, capital values grew 0.1% in October. Retail warehouses slightly outperformed the other subsectors with growth of 0.2%. Rental values across the retail sector decreased -0.1% over the month. High street shops in the South East outperformed the rest of the sector reporting rental value growth of 0.2%. Retail warehouse and shopping centre rental values decreased -0.1% and -0.2% respectively.

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